Homes Near Manhattan’s New Second Avenue Subway Saw Values Rise

Data on the first anniversary of the Upper East Side underground stations’ opening show local median recorded sales prices increase

By Liz LuckingOriginally published on January 13, 2018|Mansion Global|

The Second Avenue subway, an almost eternal pipe dream for New Yorkers since the turn of the 20th century, finally became a reality in January 2017 with the completion of the first phase of the long-awaited transportation project serving Manhattan’s East Side.

When work on the Q subway extension finally began in 2007, The New York Times predicted it would bring “new cachet to addresses on Second Avenue and eastward,” and it appears the paper was correct.

The areas that became home to new subway stations saw higher increases in their median recorded sales price last year, compared to other areas nearby, according to data compiled for Mansion Global by StreetEasy.

Yorkville—an Upper East Side neighborhood that extends from East 79th Street up to East 96th Street, from Third Avenue to the East River—is home to two of the three new subway stations and has been the neighborhood most affected overall by the subway extension, said Douglas Elliman broker Richard Steinberg, who estimates that he does 80% of his business on the Upper East Side.

It’s one of the few neighborhoods in Manhattan that has experienced constant real estate growth year-on-year since 2013, according to StreetEasy’s data, despite the fact that its 2017 median recorded sale price of $890,000—a rise of 1.2% from 2016—is below that of neighboring areas. Affluent Carnegie Hill—in the northwest corner of the Upper East Side, known for its museums and galleries—and Lenox Hill—an area slightly closer to Midtown—logged median sales prices of $1.8 million and $1.275 million in 2017 respectively, according to the data.

“With a median price in 2013 under $700,000, Yorkville ranked as relatively affordable by Manhattan standards,” said Grant Long, StreetEasy’s senior economist. “As a result, the area was primed for gains as the subway became a reality, and more New Yorkers turned to the neighborhood as an attractive area in which to buy,” he said.

“The increased interest in the area—driven by both relative affordability and improved transit options—has also attracted the attention of developers of newer buildings” in an area typically known for pre-war and post-war construction, “thereby pushing up the quality—and price—of units on the market,” Mr. Long added.

Among some of the most high-end new buildings east of Third Avenue is the Robert A.M. Stern-designed 20 East End Avenue, The Kent at 200 East 95th St. and Citizen360 at 360 East 89th St. Construction on all was completed last year.

Mr. Steinberg said he saw a dramatic increase in inquiries following the opening of the subway. “That started to surge about six months ago,” Mr. Steinberg said. “It’s not a coincidence.”

“Prior to the subway line people didn’t want to buy there,” he said.

The first two miles of tunnel and track of the Second Avenue subway extend below the Upper East Side and there are new entrances at 96th Street, 86th Street and 72nd Street, plus a stop at the existing 63rd Street and Lexington Avenue station. Plans for the full Q line extension include 16 stations connecting 125th Street in Harlem to Hanover Square in the Financial District, according to the Metropolitan Transportation Authority. The next phase is tentatively scheduled to open between 2027 and 2029, according to the U.S. Department of Transportation.

A closer look at the ZIP Codes that comprise the entire Upper East Side (10021, 10028, 10065, 10075 and 10128) show that the three that have new Q subway stations in them saw higher increases in the median recorded sales price compared to those that do not.

The 10021 ZIP Code, home to the 72nd Street Q stop, saw its median recorded sale price rise 15.78% to $1.1 million between 2016 and 2017. In the longer term, median prices grew to $1.1 million in 2017 from $843,500 in 2013, af 30.4% increase, StreetEasy data show.

The 10028 ZIP Code, where you’ll find the new 86th Street stop, saw median recorded sale prices rise 14.15% year over year to $1.21 million, according to the data. Prices rose 32.24% to $1.21 million in 2017 from $915,000 in 2013.

The 10128 ZIP Code, home to the 96th Street station, saw the smallest yearly increase at 2.5%. But the station furthest uptown logged the biggest five-year change, as sales prices leapt 47% to $1.15 million in 2017 from $780,000 in 2013.

The 10075 and 10065 ZIP Codes—neither of which gained a new subway station—saw prices fall year on year, down 5.7% and 13.27% respectively. They logged much lower long-term change too, falling 6.7% and rising 6.3%, respectively.

For comparison, Manhattan saw its median recorded sale price rise 10.11% between 2016 and 2017 and 33.53% in the past five years, according to the StreetEasy data.

But is the subway the only reason prices and interest in the neighborhood has risen?

“It’s a question of chicken or egg,” said broker Dolly Lenz, founder of the eponymous brokerage Dolly Lenz Real Estate. “What came first? The Second Avenue subway or the infrastructure around it?”

“If you ask me to guess, developers bet on the area because of the Second Avenue subway,” Ms. Lenz said. “The planning [for the subway] came first and made everyone spend money there and after they spent money there, everyone wanted to be there.”

Developers weren’t the only ones to wager on the area. Compass broker Stacey Froelich said that since the opening of the subway, she has seen a whole new crop of buyers “who would never have even considered the Upper East Side before because of the commutes.”

Meanwhile, she said, “anyone who was brave enough to buy on Second Avenue before the subway, they got a discount and they are reaping the benefits now.”